Business Irish

Saturday 25 March 2017

Army of lawyers keeping watch as affidavit buys insurer time

Dearbhail McDonald

Dearbhail McDonald

LATECOMERS arriving at courtroom number four yesterday morning might have been forgiven for thinking that High Court President Nicholas Kearns had disposed of Sean Quinn's epic legal battle within minutes as he adjourned, to another day, the tragic case of a man with locked-in syndrome.

After a brief recess, the judge moved quickly on to the Quinn Insurance saga.

Unlike victims of locked-in syndrome, Sean Quinn has no problem communicating his message, but he must have felt increasingly immobilised as lawyers representing bondholders and insurance companies vying to prize his insurance business from his grip poured into the court to monitor the proceedings and report back to their clients.

Under the 1983 and 1989 Insurance Acts, which were amended last year, the only parties that can be represented at rarely invoked insurance administration hearings, unless the High Court directs otherwise, are the petitioner -- in this case the Financial Regulator -- and the company involved, Quinn Insurance Limited (QIL).

But there was a small army of lawyers carrying out "watching briefs" yesterday, including senior partners from several major law firms who did not seek an audience, but whose presence on behalf of Quinn's major creditors -- as well as an opportunistic rival -- underlined the significance of the hearing.

"There's quite a lot at stake," remarked Michael Cush, QIL's senior counsel. Judge Kearns, a front-runner for the office of chief justice when that position becomes available in 2012, knows this only too well.

He was at home on Sunday when papers arrived from the Financial Regulator, containing new information to support its case that Quinn Insurance be placed into permanent administration.

The regulator, Matthew Elderfield, had been expected to provide new evidence about how Quinn Insurance has been managed over recent years, which explained the presence of so many watching briefs.

It was also expected that Mr Elderfield, dubbed 'the sheriff', would disclose the hitherto secret terms of a deal his office reached with Mr Quinn in 2008 when his insurance group last broke solvency rules, leading to an unprecedented €3.25m fine against the firm and a €200,000 penalty imposed personally on Mr Quinn.

But that material was itself usurped by the production of a lengthy affidavit which was filed by Quinn Insurance just an hour before the administration hearing was due to take place.

The submission of the affidavit served to buy time for Quinn for another week after lawyers for the regulator agreed to consider its contents.

The regulator will now absorb the contents and will file his response by close of business tomorrow, leaving QIL less than 48 hours to reply before the insurer files its final affidavit on Friday evening in advance of next Monday's showdown.

Quinn Insurance sought an extra 72 hours to hammer out a resolution, seeking to issue its reply early next week, a request that was turned down.

Despite the mildly conciliatory tone struck by the regulator in consenting to an adjournment, it is hard to assess if and by how much QIL's affidavit will progress the deadlock that has endured between the two factions.

While QIL said that it hoped the adjournment would allow enough time to hammer out a resolution, a first glance by the regulator at the affidavit -- which he said didn't appear to "go in substance" into his key concerns -- suggests the mighty Quinn's pain has been deferred.

The question is: for how long?

Irish Independent

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